South African white maize on the JSE Securities Exchange South Africa rocketed on Friday on the back of the continued lack of widespread rain in the country’s maize belt, at a time when farmers are trying to sow maize.
Wheat continued to stage a recovery, after registering a dramatic loss in value since the beginning of November. White maize, the country’s staple, headed towards an all-time high for the commodity — above R2 000 a ton.
The July white contract closed R45 up at R1 950 a ton, the fifth consecutive-trading-day that the contract has finished at a new high.
July white is now trading at full carry between new and old crop, indicating that the market is pricing in the dry period, since September, to continue indefinitely.
“July was up due to the hot, dry weather. Position rolling and squaring in December ahead of the first day for delivery of maize on Monday also played a role in pushing prices higher,” a trader in Pretoria said.
“As long as it doesn’t rain, white maize is going to continue up. It is really dry and every week there are forecasts for rain and little falls,” a Free State local trader said.
Yellow maize, which is used for animal feed, ended mixed, in listless trade, as yellow maize imports continue to depress prices.
July yellow contract finished R8 down at R1 485 a ton.
“Wheat is up as some players are caught short. Wheat prices are also offering good value at these levels. In addition, the dry weather is continuing to knock the late planted wheat crop in the Free State, so there will be a lower total wheat crop that previously expected,” a trader said.
On Friday, for the first time since November 6, March wheat’s 15-day relative strength index (RSI) rose to just below 30 after being much oversold for a sustained period.
The March wheat contract ended up R30 at R1 801 per ton while March sunflowers ended R45 higher at R2 550 a ton. – I-Net Bridge